SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
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For the Period ended March 31, 1997
Commission File 0-8913
SUPER 8 MOTELS, LTD
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(Exact name of registrant as specified in its charter)
CALIFORNIA 94 - 2514354
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2030 J Street
Sacramento, California 95814
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Address of principal executive offices Zip Code
Registrant's telephone number,
including area code (916) 442 - 9183
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes XX No
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<PAGE>
SUPER 8 MOTELS, LTD.
(A California Limited Partnership)
FINANCIAL STATEMENTS
MARCH 31, 1997 AND 1996
<PAGE>
SUPER 8 MOTELS, LTD.
(A California Limited Partnership)
INDEX
Financial Statements: PAGE
Balance Sheet - March 31, 1997 and December 31, 1996 2
Statement of Operations - Three Months Ended
March 31, 1997 and 1996 3
Statement of Changes in Partners' Equity -
Three Months Ended March 31, 1997 and 1996 4
Statement of Cash Flows - Three Months Ended
March 31, 1997 and 1997 5
Notes to Financial Statements 6
Management Discussion and Analysis 7 - 8
Other Information and Signatures 9 - 10
<PAGE>
Super 8 Motels, Ltd.
(A California Limited Partnership)
Balance Sheet
March 31, 1997 and December 31, 1996
3/31/97 12/31/96
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ASSETS
Current Assets:
Cash and temporary investments $ 1,201,460 $ 1,058,309
Accounts receivable 121,896 122,841
Prepaid expenses 5,347 24,463
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Total current assets 1,328,703 1,205,613
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Property and Equipment:
Buildings 5,223,252 5,223,252
Furniture and equipment 1,082,997 1,049,769
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6,306,249 6,273,021
Accumulated depreciation (4,681,241) (4,620,543)
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Property and equipment, net 1,625,008 1,652,478
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Other Assets: 19,694 20,488
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Total Assets $ 2,973,405 $ 2,878,579
============ ============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Current portion of note payable $ 29,366 $ 28,148
Accounts payable and accrued liabilities 216,217 167,471
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Total current liabilities 245,583 195,619
Long - Term Liabilities:
Note payable 924,528 932,561
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Total liabilities 1,170,111 1,128,180
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Contingent Liabilities (See Note 1)
Partners' Equity:
General Partners 68,588 66,559
Limited Partners 1,734,706 1,683,840
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Total partners' equity 1,803,294 1,750,399
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Total Liabilities and Partners' Equity $ 2,973,405 $ 2,878,579
============ ============
The accompanying notes are an integral part of the financial statements.
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<PAGE>
Super 8 Motels, Ltd.
(A California Limited Partnership)
Statement of Operations
For the Three Months Ending March 31, 1997 and 1996
Three Months Three Months
Ended Ended
3/31/97 3/31/96
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Income:
Guest room $ 911,720 $ 747,854
Telephone and vending 21,702 17,469
Interest 10,067 5,101
Other 8,844 6,215
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Total Income 952,333 776,639
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Expenses:
Motel operating expenses (Note 2) 575,173 546,902
General and administrative 28,635 26,475
Depreciation and amortization 61,492 64,403
Interest 20,319 20,876
Property management fees 47,152 38,581
Partnership management fees 16,667 13,889
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Total Expenses 749,438 711,126
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Net Income (Loss) $ 202,895 $ 65,513
============ ============
Net Income (Loss) Allocable
to General Partners $2,029 $655
============ ============
Net Income (Loss) Allocable
to Limited Partners $200,866 $64,858
============ ============
Net Income (Loss)
per Partnership Unit $40.17 $12.97
============ ============
Distribution to Limited Partners
per Partnership Unit $30.00 $25.00
============ ============
The accompanying notes are an integral part of the financial statements.
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<PAGE>
Super 8 Motels, Ltd.
(A California Limited Partnership)
Statement of Changes in Partners' Equity
For the Three Months Ending March 31, 1997 and 1996
1997 1996
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General Partners:
Balance at beginning of year $ 66,559 $ 58,480
Net income (loss) 2,029 655
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Balance at end of period 68,588 59,135
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Limited Partners:
Balance at beginning of year 1,683,840 1,421,524
Net income (loss) 200,866 64,858
Distributions to limited partners (150,000) (125,000)
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Balance at end of period 1,734,706 1,361,382
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Total balance at end of period $ 1,803,294 $ 1,420,517
============ ============
The accompanying notes are an integral part of the financial statements.
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<PAGE>
Super 8 Motels, Ltd.
(A California Limited Partnership)
Statement of Cash Flows
For the Three Months Ending March 31, 1997 and 1996
1997 1996
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Cash flows from operating activities:
Received from motel revenues $ 944,513 $ 767,664
Expended for motel operations and
general and administrative expenses (599,717) (580,509)
Interest received 8,765 3,760
Interest paid (20,367) (20,920)
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Net cash provided by operating activities 333,194 169,995
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Cash flows from investing activities:
Purchases of property and equipment (33,228) (36,056)
Proceeds from sales of property and equipment - -
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Net cash provided (used) by investing activities (33,228) (36,056)
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Cash flows from financing activities:
Principal payments on notes payable (6,815) (6,262)
Distributions paid to limited partners (150,000) (125,000)
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Net cash provided (used) by financing activities (156,815) (131,262)
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Net increase (decrease) in cash
and temporary investments 143,151 2,677
Cash and Temporary Investments:
Beginning of period 1,058,309 631,200
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End of period $ 1,201,460 $ 633,877
============ ============
Reconciliation of net income to net cash provided by operating activities:
Net income (loss) $ 202,895 $ 65,513
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Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 61,492 64,403
(Gain) loss on sale of property - 444
(Increase) decrease in accounts receivable 945 (5,215)
(Increase) decrease in prepaid expenses 19,116 17,734
Increase (decrease) in accounts payable
and accrued liabilities 48,746 27,116
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Total adjustments 130,299 104,482
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Net cash provided by
operating activities $ 333,194 169,995
============ =============
The accompanying notes are an integral part of the financial statements.
- 5 -
<PAGE>
Super 8 Motels, Ltd.
(A California Limited Partnership)
Notes to Financial Statements
For the Three Months Ending March 31, 1997 and 1996
Note 1:
The attached interim financial statements include all adjustments which are, in
the opinion of management, necessary to a fair statement of the results for the
period presented.
Users of these interim financial statements should refer to the audited
financial statements for the year ended December 31, 1996 for a complete
disclosure of significant accounting policies and practices and other detail
necessary for a fair presentation of the financial statements.
In accordance with the partnership agreement, the following information is
presented related to fees paid or accrued to the General Partner or affiliates
for the period.
Property Management Fees $47,152
Franchise Fees $18,257
Partnership Management Fees $16,667
Note 2:
The following table summarizes the major components of motel operating expenses
for the periods reported:
Three Months Three Months
Ended Ended
3/31/97 3/31/96
------------ ------------
Salaries and related costs $ 199,494 $ 189,640
Rent 47,911 46,198
Franchise and advertising 45,643 31,686
Utilities 41,587 31,686
Allocated costs,
mainly indirect salaries 66,165 68,728
Replacements and renovations 9,904 10,594
Other operating expenses 164,469 168,370
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Total motel operating expenses $ 575,173 $ 546,902
============ ============
The following additional material contingencies are required to be restated in
interim reports under federal securities law: None.
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<PAGE>
Super 8 Motels, Ltd.
(A California Limited Partnership)
Management Discussion and Analysis
of Financial Condition and Results of Operation
March 31, 1997
LIQUIDITY AND CAPITAL RESOURCES
The Partnership has current assets of $1,328,703 which exceed its current
liabilities of $245,583 by $1,083,120. This surplus provides an operating
reserve equal to 21.7% of the Partnership's original capital raised. While the
Partnership agreement has no reserve requirement, the General Partner has set a
$250,000 target (5% of the Partnership's original capitalization).
As shown on the Statement of Cash Flows for the three months ended March 31,
1997, the Partnership's cash resources increased by $143,151 during the period
covered by this report as compared with an increase of $2,677 during the
corresponding period of the preceding fiscal year. The increase in net cash flow
is primarily due to the increase in cash flow from operations, as discussed
below. Other than operating cash flow, additional borrowing against the
properties is the only realistic source of cash in the unlikely event that
reserves do not satisfy the Partnership's future cash requirements.
During the three month period covered by this report, the Partnership's
expenditures for replacements and renovation totaled $43,131 or 4.7% of guest
room revenues. The Partnership spent $33,228 on washers for the South San
Francisco and Sacramento properties.
RESULTS OF OPERATIONS
The following is a comparison of the first three months of the fiscal year
ending March 31, 1997 with the corresponding period of the preceding fiscal
year.
Total income increased $175,694 or 22.6%. The major revenue item, guest room
revenue, increased $163,866 or 21.9%, due to an average daily room rate increase
from $43.16 in 1996 to $45.72 in 1997 and an average occupancy rate increase
from $58.6% in 1996 to 68.2% in 1997. All three motel achieved increases in both
average daily room rate and average occupancy rate. The South San Francisco
motel achieved 69% of the increased guest room revenues. The South San Francisco
market achieved higher patronage in all market segments with the highest
increases in the leisure and corporate market segments.
- 7 -
<PAGE>
Super 8 Motels, Ltd.
(A California Limited Partnership)
Management Discussion and Analysis
of Financial Condition and Results of Operation
March 31, 1997 (Continued)
Total expenses increased $38,312 or 5.4% during the three months ended March 31,
1997 as compared to the corresponding quarter of the previous fiscal year. This
increase is attributable to the increase in guest room occupancy.
FUTURE TRENDS
The General Partners anticipate a slightly improved economic climate for 1997 as
compared with the previous fiscal year. The South San Francisco market, which
traditionally generated 40% of the Partnership's room revenue, has recovered
from its depressed condition. The General Partners have determined that a
continuing cost control strategy will provide the best immediate return to the
Partnership. The major components of the cost control program were in place by
December 31, 1993 and continue to benefit the Partnership through the fiscal
quarter covered by this report.
The Sacramento property had significant occupancy from the McClellan Air Force
Base. The facility was added to the 1995 base closing list. The room nights
generated from this source will decline as the base operations are phased out
through 2002. The actual closing activity and the future use of the facility
should generate some business for the Sacramento motel.
In the opinion of Management, these financial statements reflect all adjustments
which were necessary to a fair statement of results for the interim periods
presented. All adjustments are of a normal recurring nature.
- 8 -
<PAGE>
PART II. OTHER INFORMATION
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Item 1. Legal Proceedings
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None
Item 2. Changes in Securities
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None
Item 3. Defaults upon Senior Securities
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None
Item 4. Submission of Matters
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None
Item 5. Other Information
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None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
None
-9-
<PAGE>
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SUPER 8 MOTELS, LTD
5-5-97 By /S/ David P. Grotewohl
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Date David P. Grotewohl,
President of Grotewohl
Management Services, Inc.,
Managing General Partner
5-5-97 By /S/ David P. Grotewohl
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Date David P. Grotewohl,
Chief Financial Officer
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,201,460
<SECURITIES> 0
<RECEIVABLES> 121,896
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,328,703
<PP&E> 6,306,249
<DEPRECIATION> 4,681,241
<TOTAL-ASSETS> 2,973,405
<CURRENT-LIABILITIES> 245,583
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,803,294
<TOTAL-LIABILITY-AND-EQUITY> 2,973,405
<SALES> 933,422
<TOTAL-REVENUES> 952,333
<CGS> 575,173
<TOTAL-COSTS> 575,173
<OTHER-EXPENSES> 153,946
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,319
<INCOME-PRETAX> 202,895
<INCOME-TAX> 0
<INCOME-CONTINUING> 202,895
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 202,895
<EPS-PRIMARY> 40.17
<EPS-DILUTED> 40.17
</TABLE>
